How Much To Budget For Home Repairs

Whether you're a first-time buyer or an experienced homeowner, at some point you'll need to make home repairs. And those repairs will cost money. It's something first-time buyers often don't think about ahead of time and experienced owners may have learned the hard way. So budgeting at least some money in advance for these expenses is a must. Here's how to figure it all out.

Common Budgeting Approaches

The first step is deciding how much to save for home repairs. Here are a few different ways you can approach budgeting.

• Save 1 to 3 percent of the price of your home per year. That means if your home was $200,000 you should devote $2,000 to $6,000 per year to your home repair budget. This rule is based on a per-year average over a longer period of time. Some years you'll spend less and some years more. Depending on other factors, you may want to be on the lower or higher end of that range.
• Save $1 per square foot per year. This makes sense because larger square footage means there is more house to keep repaired. For a 2500 square foot house, that comes out to $2,500 per year.
• A basic budget plus a project-specific budget. If you know a major repair is a few years out, use the average costs in your area or actual estimates for those repairs and break them down into payments. You'll still need money to cover the little repairs too, but knowing you need to save at least $300 per month to make that new roof a reality in a few years can be a starting point. Your budget can change a little based on the projects.

Adjusting The Basic Budget For Your Home

Once you have a starting point, you'll need to adjust your budget to account for the specifics of your home.

• Age of your home. Older homes often (but not always!) require more upkeep costs.
• Current condition of your home
• Climate. Climate variances can make your home more likely to need certain repairs. Knowing what you're likely to see down the road can help you adjust your budget and take the necessary preventative measures.
• Exposure to extreme weather and the possibility of storm damage.
• Single-family vs. condo or townhouse. Condos and townhouses have a lower repair budget because some of the costs are covered by your homeowner's association fees or project-specific fees.

Add 10 percent of your basic budget per year for each factor that increases the likelihood of repairs. For example, a basic budget of $2,000 per year for an older home in an area where bad weather is common would increase that budget to $2,400 per year.

Money Saving Tips

• Use a separate savings account and automatic deposits. Designating a separate account specifically for repairs and setting up automatic deposits or transfers makes saving easy. Don't tie up this money in long-term investments, you'll want to be able to access it immediately if you need it.
• Use a budgeting app. It can help you cut costs on everyday expenses so you can divert that money to your home repair budget.
• Consider DIY projects. Many smaller home repairs require only basic skills that are easy to learn. Just be realistic and do your research ahead of time. Save calling the professionals for the big jobs.

While no one can guess exactly what your home repair costs will be, being prepared and budgeting in advance will save you lots of headaches later and allow you to enjoy the benefits of homeownership for years to come.

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